New route

Gene Conti tries to get somewhere with moving the politics out of state transportation planning.

By Edward Martin

In 1971, the smell of tobacco scented the morning air as Allen Joines, fresh out of college, arrived for his first job at the old brick-and-granite city hall. Winston-Salem’s cigarette plants were at peak production. In rural communities north of town, growers had heard the rumors: Someday a big road would cut through their farms to whisk traffic around the city. Joines would retire 29 years later as deputy city manager and, the following year, be elected mayor. By then, smoking had fallen from favor, costing the Twin City thousands of jobs. Still, the state’s fourth-largest city continued to grow, as did its traffic. Relieving the congestion, its leaders knew, was essential to its revival. But the 34-mile Northern Beltway remained unbuilt.

Politics had long been the rule of the roads in North Carolina, with a seat on the N.C. Board of Transportation one of patronage’s prize plums. Marc Basnight, for example, had used his as a springboard to a 27-year career in the state legislature, including 18 years as Senate president pro tempore. By the time he retired in 2011, U.S. 64 barreled across the coastal plain, a highway of almost interstate quality from Raleigh to his hometown of Manteo. What got built where often was based not so much on need as whom you knew and what strings they pulled.

First proposed in 1965 but stalled by politics, lawsuits and lack of money, the Northern Beltway inched its way up the state’s priority list. Then, in 2010, it got what seemed to be a death sentence. “We’d been ranked No. 3 in the state but got pushed back to almost dead last,” Joines says. The irony was that the project was victim of a new system, one supposed to be based on data rather than deals. The previous year, Gov. Beverly Perdue had named Gene Conti her secretary of transportation. “We can’t have personal friendships and politicians influencing the projects we pick and their outcomes,” she says she told him. “That was the old. I want a secretary able to withstand the political pressures.”

That Perdue, a New Bern Democrat who rose to power among the eastern politicians who pulled those levers, had tasked this to someone who had spent his career in politically appointed posts was a paradox. Conti’s sole job in the private sector, which he had left and taken a pay cut to accept the $120,000-a-year cabinet post, was with an engineering company that concentrates on public works projects.

“Historically, roads and votes have been one and the same,” says Christie Barbee, executive director of the Raleigh-based Carolina Asphalt Paving Association, whose membership includes those delivering millions of dollars of road materials to the state each year. Nearly three quarters of Conti’s department’s $4.5 billion budget in fiscal year 2011 went to the contractors and vendors that build highways and bridges and provide services for the transportation system. North Carolina has 80,000 miles of state roads, second only to Texas, maintained by roughly 12,000 state employees. The Department of Transportation also operates two major ports and passenger rail service, a railroad and has a hand in funding more than 60 airports. It’s a vast, rich empire, ripe for regional feuds, conflicts and, occasionally, outright corruption. “Projects are now rated and prioritized based on need,” Barbee says. “He’s made tough choices, but they’re working.”

Against that backdrop, the crestfallen Winston-Salem leaders headed to Raleigh. Instead of the political ammunition traditionally needed, they packed data on cost, safety and traffic. “We never argued the formula wasn’t a good idea,” Joines says. “We just argued there was a flaw in the calculation.” Adds Winston-Salem Chamber of Commerce President Gayle Anderson: “Needless to say, some of the negotiations got pretty testy.” But their arguments won out. Early next year, the state will begin buying $34 million of right-of-way for the first 2 1/2 miles of the $1.1 billion project.

It was one of the first tests for a department long considered the most politicized arm of state government, now run by a soft-spoken man making hard decisions not likely to win him friends. Last year, for example, he alienated powerful politicians by firing the CEO of the state’s ports without consulting members of the Ports Authority, who were used to wielding power on their own. “Everywhere he goes, nine times out of 10, people aren’t happy,” Anderson says. “Either they’re not building a road where somebody wants it or building where somebody doesn’t want it. It’s too expensive. It’s not the kind of road they want. It’s not pretty enough. It’s a tough job.”

His road there took twists, turns and detours. Conti grew up in Pittsburgh, the youngest, and only boy, of seven siblings. Around the dinner table, his father — a doctor who was the son of a doctor — would preside. “He was deliberate,” Conti, 66, says. “We didn’t wolf down our meals and run off. We had discussions.” John Kennedy’s admonition to ask what you can do for your country made an impression on him. He graduated from Central Catholic High School in 1964, only a few months after Kennedy’s assassination, and his yearbook listed his career plan: public service.

Enrolling at Georgetown University in Washington, D.C., he was torn between getting an education and acting upon JFK’s words. He dropped out to join Volunteers in Service to America, the domestic version of the Peace Corps, and worked with the poor in rural Kentucky before resuming college at Eastern Michigan University, where he earned a bachelor’s in sociology and anthropology. After starting graduate school at Duke University, he returned to Appalachia, organizing school-enrichment programs and helping form a marketing co-op to sell Christmas wreaths, quilts and other handmade products in the Midwest and Northeast.

At Duke, where he would earn a master’s in policy sciences and public affairs and a doctorate in anthropology, he met David Price, a professor of public policy and ethics. “He was not only going to graduate school,” Price recalls, “he was running a small farming operation in Orange County. He was a little older than most of my students and had more of a sense of direction.”

“I enjoyed anthropology as an intellectual discipline,” Conti says. He liked studying how and why people and cultures do what they do. “It gave me a breadth of understanding about human behavior.” He planned to teach but quickly realized he could make a bigger impact in the public sector. Active in the Orange County Democratic Party, he landed a job in Gov. Jim Hunt’s administration, then went to Washington in 1979 as an analyst in the Office of Management and Budget. Two years later, President Ronald Reagan appointed David Stockman its director. “He was the same age as me, 34,” Conti says. “My mother wanted to know why it wasn’t me.”

In Washington, he displayed a trait that would prove valuable throughout his career. “Gene’s not highly partisan,” says Eric Sundquist, managing director of the State Smart Transportation Initiative, based in Madison, Wis. “He’s involved in shaping national transportation thinking, and he’s more of a mainstream guy who can connect with the left or right.” He respected Republican Stockman, though he often disagreed with him. “But I knew at the end of the day he was boss. After he left, folks came in who were interested in ideology, not debate, and it was time for me to leave.”

He moved to the Treasury Department, juggling projects that ranged from helping the IRS dig out from its backlogs of tax returns to studying whether to do away with the penny. When Price was elected to Congress in 1986, Conti signed on as his legislative director, later becoming chief of staff. “Gene had a gift for analyzing complicated policy issues and a tremendous memory for history and details,” Price says. As committee assignments were shuffled, Price landed on transportation appropriations, and Conti began his on-the-job training in transportation policy.

He left Price’s staff in 1993 to become an assistant transportation secretary in the Clinton administration before being appointed secretary of labor for the state of Maryland, where he lived, then returned to federal service as assistant secretary of transportation for policy. Conti left Washington when President George W. Bush took office. He was 56, with 19 years of federal employment under his belt.

Gov. Mike Easley asked him to join DOT as deputy secretary. Conti cut a deal: He needed another year to qualify for federal retirement and other benefits, so he would work for DOT at 80% of his salary and work part time for Rep. Brad Miller, a Democratic congressman from Raleigh. Political watchdogs pounced. “It should have been absolutely embarrassing for him,” says Don Carrington, an editor with the conservative John Locke Foundation. “From an ethical standpoint, it was one of the worst things he’s ever been involved in.” Pressure mounted on Easley’s staff, which issued an ultimatum: Quit the job with Miller or leave his state one.

Conti says he faced losing $300,000 or more in federal retirement benefits. So he resigned to go to work as vice president and Mid-South district director of PBS&J Corp. The Tampa, Fla.-based engineering company agreed to let him finish out his year with Miller. For the first time, he would be in the private sector. Even so, it was as PBS&J’s Raleigh-based political point man. From 2002 to 2009, he was vice chair of the N.C. Global TransPark Authority and played a key role in landing the state-funded, aviation-related industrial park’s first major tenant. He’s now its chair.

The inmates wore stripes, and a century later, their ghosts still haunt the system Conti is trying to reform. In the early 1900s, chain gangs built North Carolina’s roads. Lt. Gov. Walter Dalton, who leads a task force Perdue created to study logistics, wondered why the state’s transportation map is divided the way it is. “Today we have 14 divisions in DOT, with each represented on the transportation board,” says Dalton, now the Democratic nominee for governor. “Why 14? The answer was that was where the prison camps were located back in the early 20th century.”

Seats on the 19-member board, appointed by the governor, traditionally have gone to developers and others as rewards for campaign contributions and support. Their input can be seen on the interchanges clogging commuter routes when they’re added to expressways under pressure from land developers and local politicians, frequently over objections of highway planners and engineers. Vowing to reform the system, Perdue signed an executive order in 2009 stripping the board of the power to make such decisions and shifting it to the secretary. “I don’t work in a vacuum,” Conti says. “I work with the board, and I get a lot of input from local officials. But, ultimately, now the buck stops with me.”

“Nobody likes to lose power,” Chairman Robert Collier says. “But by and large, the board feels like it’s more equitable and fair now. We set policy, but individuals on the board don’t have that much discretion about priorities. There are weights for different characteristics like safety and congestion, so that pretty much runs itself.”

That’s change of historic magnitude. In a state with few navigable rivers, rail and roads moved people and products and, in doing so, shaped the economy. In the 1830s, Joseph Caldwell, president of the University of North Carolina, advocated a railroad through the heart of the state. The result is the state-owned North Carolina Railroad, running 317 miles from Morehead City to Charlotte. Leased to Norfolk, Va.-based Norfolk Southern Corp., it carries freight and passenger trains. The railroad, with the roads paralleling its tracks, industrialized the Piedmont Crescent, bolstering its population and prosperity. DOT’s Rail Division works with the railroad, which figures heavily in one of Conti’s top priorities, a high-speed link between Raleigh and Charlotte.

Big projects have big budgets, and the temptation for influence peddling never goes away. “Transportation isn’t like a social-welfare program, where you’re giving $100 each to a million different people,” says Harry Watson, director of the Center for the Study of the American South at UNC Chapel Hill. “If you give that much money to a dozen highway contractors and have to decide which ones, the opportunity and pressure for political involvement is high.” In many cases, short-term political expediency has hurt the state. “We’ve got ports at Wilmington and Morehead City, both with relatively low amounts of traffic,” Watson says. “Why not spend all your money to create one good major port? For political reasons, to keep everybody happy, the state has spread its investment across the two.”

But change often comes hard. A plan to spend $4.4 billion to expand the port at Wilmington has been around since 2006. The Ports Authority paid $30 million for land on the other side of the Cape Fear River to build the N.C. International Terminal, but the effort grounded on opposition from surrounding towns and environmental groups. CEO Tom Eagar was left holding the bag, insiders say. Last year, the legislature transferred the Ports Authority from the Department of Commerce to DOT, and by the end of the year, Eagar was out. He wouldn’t comment, but one authority member accuses Conti of “neutering” the board, while others hint of legal or legislative action to regain power. But many, Dalton among them, see it simply as a step by Conti to consolidate, so as to coordinate everything transportation under one roof.

With elections looming, Conti, or his successor, will have his hands full as politicians’ campaign promises come home to roost. “I spent much of my time the first year I was here talking to people across the state, explaining why we’d promised all sorts of things three, four, five or six years out and never delivered,” he says. For example, planning for Interstate 540 around Raleigh began in the 1970s, but the first link didn’t open until 1997, and portions remain unbuilt. At issue is the Transportation Improvement Program, a plan required by the federal government, which pumped more than $1.3 billion in federal money into Tar Heel projects in the 2011-12 fiscal year.

“This thing has long been a work of fiction,” Conti says. “We’ve been delivering only 50% to 60% of what we’ve said we’d do. You can’t deliver half of what you promise and expect people to have a good feeling about what you’re doing. We’ve got the board out of the process and, in collaboration with local governments, are driving it with data rather than personal political preferences.” Now Conti and his planners are looking at massive needs and massive costs. The question is which projects come first.

Bottlenecked traffic strands drivers above the muddy Yadkin River 70 feet below, with big trucks thundering by a few yards away in the opposite direction. The 60-year-old span trembles. The Interstate 85 bridge near Salisbury is the state’s most dangerous because of its age, narrow lanes, crumbling concrete and high volume. For 80,000 drivers a day, it’s a reminder of transportation priorities long askew, ignoring traffic counts, safety and engineering standards. A new northbound bridge recently opened, and its southbound companion will join it by 2014, both part of a $139 million construction package.

The Triangle Expressway in southwest Wake County is a striking contrast. It opened in December, and cars flash under overhead cameras that automatically record license-plate numbers and then send out a bill. This is North Carolina’s first toll road. More will come. Conti is not a fan, but he’s a realist. “We simply don’t have the dollars from gas taxes to support significant expansion of the highways anymore. You see Texas, Florida, Virginia — the high-growth states — going to toll roads.” He’s pushing toll projects, creating an agenda that would have been political suicide when rural forces dominated the General Assembly. Among them are the Monroe Bypass in Mecklenburg and Union counties, scheduled to be completed in 2015 but delayed by a recent court order, and the Mid-Currituck Bridge, connecting mainland Currituck County and the Outer Banks.

Urban loops such as Winston-Salem’s Northern Beltway are rising in importance, though the data-driven shuffling is ruffling feathers, as in Asheville, where a long-sought I-26 connector has been pushed to the bottom of the state’s priority list. That raises questions in some quarters whether a strict data-based system is fair to smaller cities and rural communities.

But for Conti, and possibly his successors, the loops represent massive spending and challenges. They will total more than 350 miles when finished — about 140 miles are already completed — and cost $8 billion or more. “We’re accelerating delivery of these loop projects,” Conti says. “Some were authorized in 1989 and aren’t even started yet.” Another high-priority project: proposed light-rail lines in the Triangle and expansion of the 9.6-mile one in Charlotte. The shift in priorities under Conti is popular with private-industry groups, such as the Charlotte-based Carolinas Associated General Contractors, whose highway-division director Berry Jenkins says projects are now more predictable.

Increasingly dense metropolitan regions force Conti and his planners to push projects that discourage sprawl and encourage — critics say force — urbanization. “The easy way for a developer to make a quick buck is the auto-oriented way and get out,” Sundquist says. Dalton agrees. Referring to his logistics task force, he says, “Our recommendations suggest that perhaps even local governments should give incentives for downtown living to get people off the interstates.”

By 2020, the state expects to spend $45 billion building roads, high-speed rail systems, port improvements, better airports, bicycle paths and other infrastructure and maintaining what already exists. Conti says DOT is finding new ways to pay for projects, including grant-anticipation revenue bonds, in which the state essentially uses the federal transportation money it knows it will receive in coming years as collateral for loans today.

Outside Conti’s office in downtown Raleigh, state government swirls around him. More than three years into trying to take politics out of transportation, Perdue gives him high marks for carrying out her mission. “I wanted a risk-taker, someone who understood we had only limited resources to meet transportation needs for the people of this state. Gene’s done a marvelous job.” Her opinion, though, won’t count after November. Perdue isn’t running for re-election. Dalton supports Conti. GOP nominee Pat McCrory says, “I have nothing but compliments for Gene. I knew him even before his appointment. He’s got the background, and he’s certainly qualified.” But the former Charlotte mayor won’t speculate on Conti’s future if he’s elected. “You always can use new blood.”

In places like Asheville, Conti or his successor will continue to face the reality of road projects: Somebody always has to be at the bottom of the list, and they’re not going to be happy about it. “It’s reasonable to take politics out of it,” Mayor Terry Bellamy says. “Over the course of the last few years, Asheville has taken a big hit in the legislature. We don’t have the support to get this done like we’d like. But ours was one of the first loop projects proposed in the state, back in 1988. That need’s still there.”